You will die while playing Crowfall. That’s pretty much inevitable. But you will also never die in Crowfall, because you are not your character; you are the spirit that animates that character. The death of an avatar is not the death of your actual character, merely of that guise you wear, and you can shed that fairly quickly. It’s all detailed on a nice meaty discussion about death and respawning on the official site, which emphasizes the idea that you will die, but you need not consider that much more than an inconvenience.
When your avatar dies, you’ll be able to observe the battle for a short time as a spirit crow (the same form you take when first entering a world) before you get released to the nearest temple. At that temple, you can resurrect your old avatar or occupy a new one, depending on how much time you have and what you wish to do next. Depending on the rules of the world, your old avatar may be available for looting or not; however, skills will not be lost regardless. Your enemies will also have only a limited window to loot your corpse if the world you’re on allows for looting, so it’s not automatic. It’s an interesting system for a game that’s all about PvP conflicts, one where you need not fear that death is an ending.